The Recap: Simpler tax code would mean few deductions

March 1, 2014

Rep. Dave Camp (R-Mich.), chairman of the tax-writing House Ways and Means Committee, proposed an overhaul of U.S. tax laws that would jettison hundreds of popular tax breaks in favor of a simpler code with lower rates. ¶ The plan would push the top corporate rate down to 25 percent, from 35 percent, and the top individual rate down to 35 percent, from 39.6 percent. ¶ Tax-filing season would be easier for most households, with an estimated 95 percent of filers likely to claim a new, expanded standard deduction and call it a day. ¶ But there would be no more personal exemptions, no more credits for child care, and no more deductions for medical bills or for state and local taxes. ¶ The mortgage-interest deduction would be available only for mortgages worth less than $500,000 (current mortgages would be grandfathered in). ¶ Investment income would be taxed as regular earnings (the first 40 percent would be exempt).

Business

The Mt. Gox Bitcoin exchange in Tokyo filed for bankruptcy protection, and its chief executive, Mark Karpeles, said 850,000 bitcoins, worth several hundred million dollars, are unaccounted for.

Credit Suisse helped wealthy Americans hide billions of dollars from U.S. tax collectors, and federal regulators have done little to hold violators accountable, according to a U.S. Senate report.

Detroit’s plan to deal with its $18 billion of debt and emerge from municipal bankruptcy would set a troubling precedent for the U.S. municipal bond market, Fitch Ratings said. Under the plan Detroit filed, owners of certain general-obligation bonds would take an 80 percent haircut on their investments.

JPMorgan Chase plans to eliminate 8,000 jobs this year as its mortgage business shrinks.

Investors in Allen Stanford’s $7 billion Ponzi scheme can sue to recoup losses from lawyers, insurance brokers and others who worked with the convicted swindler, the Supreme Court ruled.

The State Department’s inspector general cleared the department of allegations that it improperly hired an outside consultant with industry ties to evaluate the Keystone XL oil pipeline.

Utilities warned homeowners that they are about to get hit with a double whammy — higher natural gas prices and consumption, both driven to five-year peaks by the Arctic cold that gripped much of the country in recent weeks.

Target was ordered by a House committee with broad investigative jurisdiction to turn over internal documents and messages describing how and when it learned of a recent massive consumer data breach.

● The Carlyle Group’s co-founders took home about $750 million between them in 2013. The sums earned by Daniel D’Aniello, 67, William E. Conway Jr., 64, and David M. Rubenstein, 64, came from salary and stock dividends from their Carlyle holdings and payouts from investing personal money in the firm’s funds. They received $275,000 salaries.

Former U.S. Treasury secretary Timothy F. Geithner’s memoir has a title, “Stress Test,” and a release date, May 13.

Patton Boggs, a Washington law and lobbying firm, plans to close its New Jersey office within the next six weeks, following a second consecutive year of falling revenue.

Apple filed papers telling a federal appeals court in New York that a judge’s finding that it violated antitrust laws by manipulating electronic book prices “is a radical departure” from modern antitrust law that will “chill competition and harm consumers” if it stands.

Bernard Madoff’s longtime secretary, Annette Bongiorno, said she was in the dark about her boss’s epic Ponzi scheme. She and four other employees of the disgraced financier are on trial in Manhattan federal court. Madoff is serving a 150-year prison sentence.

The head of the United Automobile Workers said the union’s appeal of a failed organizing effort at a Volkswagen plant in Chattanooga, Tenn., will focus on the actions of outside parties, not the German automaker itself.

Maker’s Mark Distillery plant in Loretto, Ky., will undergo a $67 million expansion to keep pace with demand. Japanese beverage company Suntory is set to acquire Maker’s parent company Beam.

Deals

Jos. A. Bank rejected Men’s Wearhouse’s $1.78 billion sweetened acquisition offer. But it said it is willing to meet with its rival chain over a possible higher bid.

Earnings

Barnes & Noble, the operator of more than 1,300 retail and college bookstores, posted a $63.2 million third-quarter profit as it trimmed losses from the Nook digital unit.

Best Buy posted $293 million in profit after cutting expenses and getting more of its sales from the Internet.

Freddie Mac posted a record annual profit of $48.7 billion for 2013, triggering another fat dividend that will put taxpayers further into the black for bailing out the No. 2 U.S. mortgage company, but it warned that its recent string of earnings was unsustainable.

Gap reported a 12.5 percent drop, to $307 million, in profit on a 3 percent decline in revenue as the clothing retailer was forced to discount heavily over the holiday shopping season to entice customers.

Macy’s fourth-quarter profit rose 11 percent to $811 million.

J.C. Penney posted its first quarterly profit, $35 million, in more than two years as a return to discounting and the revival of popular private-label brands helped sales at the department-store chain’s established stores.

Economy

The U.S. economy grew at a 2.4 percent annual rate last quarter, sharply less than the 3.2 percent first thought, in part because consumers didn’t spend as much as initially estimated.

Standard & Poor’s/Case-Shiller index said 2013 was a banner year for home price appreciation, with an 11.3 percent year-over-year gain in the fourth quarter.

To the list of planets orbiting distant stars, add 715 more. That’s the number of planets, strewn among 305 planetary systems, popping out of the observational data from NASA’s Kepler space telescope. “We’ve almost doubled today the number of planets known to humanity,” said Jack Lissauer, a NASA planetary scientist.

— From news services and staff reports

↓$3.3 trillion

Projected U.S. borrowing

The endless rounds of deficit reduction in Washington in recent years have significantly improved the nation’s budget outlook, reducing projected borrowing by $3.3 trillion through 2024, according to new estimates by Senate Budget Committee Chairman Patty Murray (D-Wash.).